Brett King - Moven - New York 06 November, 2010, 00:29 0 likes

Liz,

Actionable innovation is the key, not just ideas or strategy. The harsh reality is, however, there are a lot of great ideas that often "just don't make it" because of organizational inertia around the existing status quo. Breaking the status quo is true innovation.

A great example is the cards business in the US. There is not much that can motivate the US to make wholesale changes to POS infrastructure to support chip-and-pin or even contactless (although NYC taxi cabs are getting there and contactless cards are starting to emerge.) However, I think an NFC-enabled iPhone 5 might just do it. Why? Because it will change behavior.

The hardest thing to change in banking is behavior. Right now we are seeing customer behavior (consumer and corporate) shift extremely rapidly in banking terms. This is allowing innovators in the cloud, mobile, payments, etc to slot in a layer of innovation between banks and their customers. Largely this is not because banks 'just don't get it', but the reality of changing their internal behaviors is just too hard. 

Financial services may not be changing, but the world is. There will be some in the FSI sector that adapt and change with this, and others that watch the change from afar. But the fact is change will occur whether we like it or not. Call it innovation, call it behavioral shift, call it progress - the fact is change is speeding up and putting your head in the sand is a very different strategy to deciding to try to scale everest. Those are essentially the choices...

Brett King, Author - BANK 2.0

Elizabeth Lumley - Girl, Disrupted - Crayford 06 November, 2010, 11:12 0 likes

In the late 90s, a large European bank made ambitious plans to move from the City to Canary Wharf. They consulted the traders to find out what they wanted - open plan, ergonomic chairs, touch screens etc... They hired an architect - the office was going to be modern, bright, and environmentally friendly. Their office was going to be the envy of Europe.

Then the bank got the bill for moving all the switches and routers and fibre optic cables that sat beneath the raised floor in the trading room. 

A month ago, I took the Central line to go see them, not the DLR.

My point is the same as yours - internal change is hard (and expensive). 

My blog was mostly a reaction to The Future of Money Blog - where the woman said her film went 'over the heads' of the suited 'Matrix clones'. 

First off - Bankers wear suits? OMG, when did that start?

But seriously, her film was interesting. I thought some of the young people interviewed were a tad naive and some gave real insight in how the next generation will live and...of course... bank. I think younger people will generally reject the debt-based economy of loans and mortgages that have handcuffed the older generations - and that will change the way Western capitalism works.

However, the 'over their heads' comment rubbed me the wrong way. Because people watched the film critically, with interest - does not mean it 'went over their heads' or they 'didn't get it'. 

I'm not afraid of putting my opinions out there because I understand there will be people who don't agree - (and more importantly) people who don't agree because they have more experience and knowledge than me. If anyone doesn't 'get' my blog the fault for that lies solely with me and my inability to communicate effectively. That was the biggest lesson I took away from 'journalism' school - if someone doesn't understand you - that's your fault, not theirs.

And, of course, the contrarian in me flinches at the idea of being surrounded by people who always agree with you. Even Steve Job's has made mistakes - if you ever meet him ask him if he has any NeXtStep terminals in the attic. 

Jonathan Williams, of Experian Payments, sent me a Tweet during the Innovation Keynote about the story about the Kodak innovator that was kept in the basement. He argued that maybe it was the ‘struggle' that fuelled his invention, and freedom wouldn't have produced the same results (the digital camera). Maybe, maybe not. But debate is as much a part of innovation as being surrounded by fawning fans. 

Elizabeth Lumley - Girl, Disrupted - Crayford 08 November, 2010, 16:53 0 likes

EL: I got this iin an email today. Thought it was pretty good. Interesting, NeXtStep got recognised, still no ID of Display.IT...

"Even Steve Job's has made mistakes - if you ever meet him ask him if he has any NeXtStep terminals in the attic."

Hello Liz

I don't have a Finextra login (or at least it lapsed some years ago) but still cast an eye over the blogs. The line above caught my eye. 

Although Steve Jobs, after his effective ousting from Apple, failed to make NeXtStep into a consistently profitable business in itself the longer term result has been far from unsuccessful. One could argue that NeXtStep was a mistake, or that it was the therapy that Jobs needed after being chucked out of the company that he set up and loved and where his heart has always lain. Apple's subsequent purchase of NeXtStep led directly to the construction and launch of Mac OSX which used extensive sections from the older Mach kernel code to develop things like the Dock and form what is now, arguably, the most user-friendly OS available. It also led to Jobs' reinstatement within Apple. Ultimately it has been a very good thing for him. The deal wasn't that cheap but look where the company is now on the back of it. So Jobs would now probably be happy to show you round that bit of his attic. Which is not to disagree with your premise, just the particular example. Jobs' mistakes could be, say, the Cube or the Newton which failed to gain ground and were real dead ends. There may well be piles of them upstairs at his gaff. 

The (galling to some) thing about Steve Jobs is that he seems to make fewer mistakes than many, but then I suspect that is why you used him as an example. Maybe the lesson is that while some ideas may not ultimately triumph it would be unwise to write off everyone who says you don't get it. Apple thought Jobs didn't get it back in 1985 and even his potential nemesis John Sculley and Gil Amelio have now admitted how wrong they were. And perhaps this all underlines the point about freedom and innovation. Back a true innovator into a corner and he/she just innovates all the harder. Most of them know full well where the climbing boots are, but they also know that those old boots can only get you so far, that's why noone has gone further. Invention to solve those problems doesn't come from weary cynics' comments but from imaginative optimists who push on when the cynic says give up and employ technologies that the jaundiced eye has overlooked. 

But then again, Liz - your sceptical reaction to "you just don't get it" may ultimately force a rethink in the individual which results in a stronger idea that you can concede that you "get". Or not - if we were really good at spotting the genuinely good ideas we wouldn't be where we are today, we'd be writing from our sun-loungers as major shareholders in, say, Cisco Systems or Apple.....  One can but dream.

Cheers

Pete

Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 09 November, 2010, 11:21 0 likes

IMHO, it's not as though banks don't want to embrace innovation, it's just that they take so much time that it's almost obsolete by that time, raising questions whether they should be adopting it at all now that it's almost obsolete. Their snail's pace at adopting innovation is understandable because innovation causes change, which somewhat goes against the need for constancy and trust that's part of the  overall image they need to maintain with their customers.  

At the same time, it would be wrong to conclude that they never change: For every leading bank still on the Central Line, there's one you'd need to take the Jubilee Line or DLR to visit in recent years!

Jacqui Taylor - FlyingBinary - London 11 November, 2010, 12:15 0 likes

Sorry it has taken a while to respond as I had to get my login sorted, Liz I loved this blog piece. 

You make some valid points and as we all know the core systems are difficult to change, which is why they largely haven't been changed. What I believe is different today is that the disruption has already started outside of the system. Despite this there is a long term resistance to unravel the spagetti legacy systems, this has persisted due to a general lethargy based on, why bother.

The answer to the question of why bother, is that the basic systems can be morphed from purely operational/historical use to cash generating platforms. These systems contain a goldmine of data which if ported to a Data as a Service Cloud platform with powerful analytics tools could not only reform the operations globally, but could be packaged and sold to the client base. 

I know that this innovation is already taking place, from a number of private one to one discussions with Swift members, as a Cloud Leader for Innotribe at Sibos. 

This innovator has no intention of forgetting the benefit of energising the world weary cynics, and including them in agile teams containing the next generation of innovators.

For the record the Google Apps project for PSD did not remove all the duct tape and chewing gum, however even after completion, the agile team continued to work on this, so only duct tape left now.